Indian shares rise ahead of Gujarat state polls; automakers gain

Reuters Staff

3 Min Read

* NSE index up 0.85 pct, BSE index 0.78 pct higher

* Automakers rise after reports of price hikes in Jan.

* Gujarat election outcome awaited

By Jessica Kuruthukulangara

Dec 8 (Reuters) - Indian shares rose for the second straight session on Friday amid hopes the ruling Bharatiya Janata Party (BJP) would win critical state elections in Gujarat beginning this weekend, while automakers gained on reports of an expected price hike next year.

The election in Prime Minister Narendra Modi’s home state is a key test for the BJP, ahead of general elections in 2019. The results will be out later this month.

According to polls, the BJP could win, but with a reduced majority - an outcome that would still soothe investors, who are hoping for more political stability and have largely welcomed Modi’s reform agenda.

“BJP is expected to win, but the seat count would be lower than what they were vocal about. If they do win, I think markets will take it positively,” said Saurabh Jain, assistant vice president, research, SMC Global Securities.

The broader NSE index was up 0.85 percent at 10,252.65 as of 0549 GMT, while the benchmark BSE index was 0.78 percent higher at 33,206.00. Both indexes were on track to post weekly gains.

The Nifty auto index climbed as much as 1.4 percent following media reports of automakers’ plans to hike prices next month, which analysts expect would be positive for margins.

Maruti Suzuki, among the top gainers on the NSE index, rose as much as 2.7 percent to hit an all-time high. Though media reported that the company currently did not have plans to raise prices, analysts expect the country’s biggest carmaker to announce price hikes by the end of January.

Banks also rose, with the Nifty bank index climbing 1 percent in its second session of gains. HDFC Bank Ltd and ICICI Bank Ltd were up 1.5 percent each.

Shares of Steel Authority of India Ltd jumped as much as 3.9 percent after Reuters reported, citing sources, that the state-run firm was set to approve a long-proposed $1 billion JV with ArcelorMittal SA next week. (Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Sunil Nair)